Posted by: JC Gatlin | November 22, 2010

Lean Beginnings… (part 2)

(continued from part 1) 

 

Henry Ford, July 30, 1863 - April 17, 1947

Henry Ford, the founder of the Ford Motor Company, built upon FW Taylor’s Principles of Scientific Management and applied this science to auto manufacturing.  He developed the assembly line technique of mass production.

Ford saw a deficiency in “Taylorism” though, which was a lack of respect for people.  So, he coupled higher wages for workers with his mass production of inexpensive goods.  The assembly line increased labor productivity tenfold and permitted stunning price cuts in Ford cars: from $780 in 1910 to $360 in 1914. Thus his concept involved standardizing a product and manufacturing it by mass means at a price so low that the common man could afford to buy it.

Steady flow of production while systematically lowering costs

 

Source: Detroit Public Library, Item number EB01a026

His intense commitment to systematically lowering costs resulted in many technical and business innovations, including a franchise system that put a dealership in every city in North America, and in major cities on six continents. Today, his concepts are widely referred to as “Fordism.”

Ford’s concept was so successful that it caught the attention of a Japanese auto manufacturer, who closely studied his business model and ultimately would take it to the next level.

 

image from heckeranddecker.files.wordpress.com

© November 2010 Homebuilding Partners, Inc.   twitter-logo

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